Judge approves New York diocese's $323 million bankruptcy settlement

(OSV News) -- A Catholic diocese on New York's Long Island has seen its long-running bankruptcy filing finally concluded, enabling hundreds of sexual abuse claims to be settled.

"We are grateful to God that on December 4th, the court confirmed the Plan that resolves and ends the Bankruptcy Case for the Diocese of Rockville Centre, all our parishes, and related ministries," said the Diocese of Rockville Centre, New York, in a statement.

Chief Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York signed off on the settlement, preliminarily announced in September and said by the diocese to total "just over $323 million."

That amount includes "insurance contributions, Diocesan assets and sale proceeds from Diocesan property, and contributions from parishes and other related entities," said the diocese in its statement. "The Diocese, parishes and other related entities contributed a total of $234.8 million. Insurance companies contributed a total of just over $85 million. Counsel for the Creditor's Committee contributed $3 million. All participated in order to offer equitable compensation to survivors and move this difficult ordeal towards its conclusion."

At the same time, the diocese noted, "No Catholic Ministries Appeal donations were used for this settlement."

As part of the settlement, all of the diocese's parishes -- some of which had been named in lawsuits filed under New York's lookback window for abuse claims -- "completed an abbreviated Chapter 11 to secure a release from any past liabilities for the parishes," said the diocese. "No parishes are closing as a result of this process. … Parishes will now continue their ministry, free from historical lawsuits and free from bankruptcy."

The Rockville Centre Diocese has 132 parishes and one campus parish in 115 towns across Long Island, according to its website.

The diocese's initial Chapter 11 filing in October 2020, triggered at the time by more than 200 lawsuits under New York State's Child Victims Act of 2019, did not include parishes and Catholic schools, which are separate legal entities -- although some parishes were named in the lookback window lawsuits.

The diocese had unsuccessfully petitioned the bankruptcy court to have all of those cases stayed and brought under the settlement umbrella, leaving several to be pursued in state court.

The CVA, along with the Adult Survivors Act of 2022, opened the door to hundreds of previously time-barred claims, with the number of abuse suits against the diocese adding up to at least 500, including cases dating back to the 1950s.

Having parishes file for a quick-turnaround Chapter 11 was a first for U.S. diocesan bankruptcy filings, Marie T. Reilly, a professor at Penn State Law and expert in bankruptcy law, previously told OSV News.

Reilly said the move showed the impact of the Supreme Court's June decision in Harrington v. Purdue Pharma, which said the Sackler family behind the opioid manufacturer could not be shielded from legal claims against them without the consent of those who wished to sue them for damages related to the nation's opioid addiction crisis.

"The diocese and the insurers have made it clear that they must have a blanket release of sex abuse claims against the diocese and all of the parishes within the diocese," Reilly told OSV News in September.

With the Dec. 4 ruling, the diocese said that its "goal has always been the equitable compensation of survivors of abuse while allowing the Church to continue her essential mission. We believe this plan has achieved those goals."

In its statement, the diocese expressed hope that the plan would bring "some measure of healing to survivors" while allowing "the Church to carry on the saving mission of Jesus Christ.

"Victim survivors of child abuse deserve our respect, our prayers, and our pastoral support," the diocese's statement said. "The Church is grateful for their courage and perseverance."

As of December, U.S. Catholic dioceses and eparchies have paid or pledged to pay more than $5 billion for abuse claims since 2004, according to aggregated totals from two decades of reports issued by the U.S. Conference of Catholic Bishops.